Lykken on Lending

----------------------- I don't mind correcting here, waiting all the time. Bonds are waiting for the Fed to see inflation crashing down. Massive US debt supports global bank reserves but weakens long-term economic health. Additionally, the decline in the Fed's reverse repo balances put liquidity levels at risk. So, before the Fed eases rates, … [Read more...]

----------------------- Another model's breaking Hard to take it over.The Fed is finished raising rates, yet the fight between the Bond market and the Federal Reserve continues. Bonds see data showing slumping inflation and sagging growth, while the Fed sees firm Jobs and solid consumer confidence. Both see the need for US borrowing. But how … [Read more...]

----------------------- Erratic buys Blow our minds Bears feel alright What does mechanical trading, dipping volatility, and bubbling crude tell us? Short-term Treasuries are losing hope in a March ease while the long-end is ambivalent. Bonds like ebbing inflation, but they wonder about persistent debt-driven growth.The 10-year rate trend … [Read more...]

----------------------- Bonds got tired of waiting. Wondering if Jay was ever coming around. Did the Bond buyers buy on Friday? Happy consumers bought by draining savings and using credit cards earlier in the week. Where did the new era of frugality go? Will the Fed reduce its selling of Treasuries (Quantitative tightening) to avoid liquidity … [Read more...]

----------------------- China, does your deflation hurt now? Sometimes, rates feel a little glad. What inflation? Since the US PPI fell, China’s exports increased, and yr/yr Chinese CPI dropped; does that mean China exported deflation? Short-term rates like the 2-year Treasury notes are convinced falling inflation will cause the Fed to ease … [Read more...]

----------------------- Bulls wonder, they wonder why Bonds had to go down this way The rate trend is down, but the 10-year yield needs to correct between 4.10 and 4.25% to relieve the pressure from recent short selling by fast money. Meanwhile, dropping back below 3.90 invigorates the bulls. Fundamentals remain mixed. Will ships avoiding the … [Read more...]

----------------------- We follow the rate drop and down to Reno Mark Listening to the wind - of change. Mortgages reached our target of 7% because the Fed acknowledged the need to reduce its policy restraint, and the radical climate agenda failed at COP28. Near term, without any fresh data to feed the feeding frenzy, look for a … [Read more...]

----------------------- If Bonds get to know Joe’s game. Well, then rates will trace Jobs private number, downward. The world is upset at the US fiscal irresponsibility. Despite its recklessness, the US has relatively low rates, higher indebtedness, and remains THE reserve currency. So, the global resentment of the US, makes sense. They … [Read more...]

----------------------- We’ve been waiting for so long, For Fed tightening to stop. Since the new bull market began in early November, long-term rates have dropped 50 bps even after modest month-end profit-taking. The bullish fundamental picture appears bright with: Economic weakening in China, Deflating prices in Europe, Softening US … [Read more...]

----------------------- Notes gonna wait till the midnight hour. That's when their yields come tumbling down Foreign markets and midnight meetings impact mortgage rates. Gold tells us that uncertainty is rising from OPEC’s supply adjustments, China’s exporting of deflation, Japan’s attempt to exit model land for real prices and rates, and … [Read more...]

----------------------- Have you got color on your screens? Do you ever get that fear that you can’t shift your trade, that sticks around like something in your teeth? Illiquidity and short squeezes live. The 10 yr yield takes a breath between 4.60 and 4.30, and a breakout by Thanksgiving looks unlikely. But is a storm brewing after the turkey … [Read more...]

----------------------- Little pig, inflation, let Fed in. Not by deflation; China sent, sent, sent. Well, Jay's huffin', He's puffin', He'll blowing housing in. Huffin', puffin', blowing housing in. TM Sound Bites is brought to you by PowerSeller, making hedging easy. China is exporting deflation. Consider China's Live Hog futures … [Read more...]

----------------------- Time, time, time.  See what's become of BEARS.  While BULLS look around for their possibilities.The Less than Zero curve is smaller so the Fed takes solace with high bond yields that provide economic drag.  If the Fed tightens on Wednesday, then the long end should rally because it signals a recession sooner and longer.If … [Read more...]

----------------------- Time, time, time.  See what's become of BEARS.  While BULLS look around for their possibilities.The Less than Zero curve is smaller so the Fed takes solace with high bond yields that provide economic drag.  If the Fed tightens on Wednesday, then the long end should rally because it signals a recession sooner and longer.If … [Read more...]

----------------------- Oh bully bearishOh, bully, bearish, how were we supposed to knowThe bully bears had the Fed in its corner. but now Chairman Powell says the higher for longer is predicated on data.  Signs of the economy faltering will send the bears to the exit and let the bulls school the bears.Will Powell take his last shot at … [Read more...]